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Partnerships in Business – the Win:Win:Win triangle

“Hey, we need partners” is something I have heard throughout my entire career. I haven’t heard a sound answer on why partners would be needed. Consequently, people started to get as many partners as possible – not surprisingly with little to no effect. Have you experienced the same? If so, this is an article for you for sharing thoughts and some insights.

So, why do we want to partner`? My say would be: to provide more value to the customer (win #1), to provide benefits for the partner (win #2), and of course provide a benefit for own company (win #3). Value and benefit and “the win” depends on the type of a partnership. Understanding the envisaged type of a partnership helps you to manage expectations for all stakeholders and also to define goals for what you want to achieve (I’d say: no goals, no success).

Selling software products (that’s what I did in the past 1.5 decades) is typically suited for the following types of partners:

  1. Sales Partnership: in such a partnership, the partner is ideally listed as vendor for the customer which is already a win for all since it reduces time and complexity in the procurement cycle. It’s key that the partner’s sales team gets targets for the product, that the vendor support the partner’s sales team, and that you team up for non-standard sales situations (like a company license).
  2. Hosting Partnership: the partner can sell the solution, but also install and run it for a customer. Since many organisations go away from manual technical work, this is a service adding even more benefit. For the partner it’s an additional offering in his portfolio making him a better choice for customers.
  3. Managed Service Provider (MSS): such partners can do all of the above but also use the product (on behalf of the customer) and feedback the results to the customers organisation. This is particularly valuable in expert domains where experts are not easy to find and hire.

For sure, there are more types of partnerships like technical partners that offer complementary components. But that is a different story told on another day.

I have seen things going wrong in establishing a partner model. 1) it’s about quality, not quantity. As mentioned in the beginning, many partners don’t help you if the partnership is not alive. 2) Consequently, a partnership will silently die if nobody cares. You need partner managers, a mutually agreed go-to-market approach, and regular working together situations (maybe every day!). 3) I have seen partners asking for exclusivity – you don’t want that because it adds too many restrictions on everyone. The customer decides which route to follow, not a partner agreement. Non-competition and non-solicitation clauses can be accepted. 4) In cases where one partner is small and the other is big, discussions are often not at eyes level. I’d say that size doesn’t matter but being fair and polite. If this is not the case: next one, please.

Ultimately, a first, joint win is the driver for success. So setup a team with exactly this goal, win your first deal together and take it from there. Nothing is a better motivation than success.

In a followup article I will write about a “partners only” model which is particularly suited for product companies.

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